TDS Sections 192–194T vs Sections 392–393: What Changed Under the Income-tax Act, 2025?

From 1 April 2026, businesses do not lose the familiar TDS framework—but they do need to stop reporting post-transition transactions under the old section numbers. The Income-tax Act, 2025 consolidates the many withholding provisions that sat across sections 192 to 194T of the Income-tax Act, 1961 into section 392 for salary and section 393 for most other TDS payments. The policy is broadly preserved; the architecture and reporting references change materially.

Old law — Income-tax Act, 1961

Under the 1961 Act, salary withholding was governed by section 192, while different non-salary payments were spread across numerous provisions from sections 193 through 194T. A deductor therefore identified the nature of payment and then applied the corresponding standalone section—for example, section 194C for specified contractor payments, section 194H for commission or brokerage, or section 194J for specified professional or technical fees.

New law — Income-tax Act, 2025

The 2025 Act reorganises the framework. Section 392 deals with deduction of tax from salaries. Section 393 consolidates other specified TDS payments into tables. For resident payees, the table brings together the nature of income or sum, the person responsible for deduction, the threshold and the applicable rate in one statutory structure. The Income Tax Department has expressly described this as a simplified and tabular presentation rather than a broad change in TDS policy.

What actually changed?

The biggest operational change is statutory mapping. A finance team processing a contractor invoice after the transition should no longer treat “194C” as the reporting reference merely because that was the familiar section under the old Act. The Department’s transition guidance gives the example of a contractor payment on 5 April 2026: the TDS return should quote section 393(1), resident-payee table, serial number 6(i), rather than old section 194C. The Department warns that using an old section reference for a post-1 April 2026 transaction may create system-level validation or processing errors and can require a correction statement.

What did NOT change?

This consolidation should not be mistaken for a wholesale increase or reduction in withholding tax. Official guidance states that TDS rates and monetary thresholds are retained, subject of course to the Finance Act and the precise provision applicable to the transaction. The familiar “earlier of credit or payment” trigger also continues for payments where that rule applies. Deposit timelines are likewise retained under the Income-tax Rules, 2026, according to the Department’s transition FAQs.

Transition rule: 31 March 2026 is the dividing line

For TDS, the governing Act generally follows the date on which the relevant deduction obligation crystallises. If the earlier event of credit or payment occurs on or before 31 March 2026, the 1961 Act applies. If it occurs on or after 1 April 2026, the corresponding provisions of the 2025 Act apply. This matters even where the actual cash payment, TDS deposit or contract period crosses the transition date.

Worked example: March invoice, April payment

Assume a company records professional fees payable to a resident consultant on 31 March 2026 but pays the consultant on 10 April 2026. Because the credit occurred first, on 31 March, the TDS obligation is governed by the Income-tax Act, 1961. The mere fact that payment or deposit happens after 1 April does not move that already-triggered obligation into the 2025 Act.

Worked example: April contractor payment

Now assume the company neither credits nor pays the contractor until 5 April 2026. The withholding event falls after commencement of the new Act. The company must use the applicable item under section 393 rather than quote old section 194C. The underlying rate/threshold may be substantially familiar, but the statutory reference used in systems and returns changes.

Practical impact for businesses and finance teams

ERP masters, vendor tax codes, payroll/finance SOPs, TDS working papers and return-preparation software should be updated for the new statutory mapping. Cut-off testing around March and April 2026 is particularly important: teams should retain the date of credit, date of payment, applicable Act and mapped section/table item in their audit trail. Old and new compliance will temporarily coexist because obligations relating to periods before 1 April 2026 continue under the repealed Act while Tax Year 2026–27 transactions operate under the 2025 Act.

Quick compliance checklist

1. Identify whether the withholding trigger occurred before or after 1 April 2026. 2. Preserve old-Act section references for obligations crystallised up to 31 March 2026. 3. Use sections 392/393 and the correct table item for new-Act TDS transactions. 4. Update ERP and return-preparation mappings. 5. Do not assume consolidation itself changed the tax rate or threshold—verify the applicable 2025 provision and Finance Act. 6. Reconcile March/April cut-off items before filing TDS statements.

Primary-source position

The Income Tax Department’s current Tax Payments and TDS Compliance FAQs state that sections 192 to 194T of the 1961 Act have been consolidated into sections 392 and 393 of the 2025 Act, that rates and thresholds are retained, and that transactions from 1 April 2026 must use the new statutory references. Section 393 of the enacted Income-tax Act, 2025 itself sets out the tabular TDS framework. The 2025 Act replaced the 1961 Act from 1 April 2026, while transitional provisions preserve earlier-year obligations and proceedings.

Conclusion

For most deductors, the TDS change is less about a new withholding policy and more about a new compliance map. The risk is therefore operational: using yesterday’s section codes in today’s ERP or TDS return. Businesses should treat the 31 March/1 April cut-off as a controlled migration exercise and document how each old section maps into the relevant 2025 Act table item.

For businesses reviewing TDS system mappings or transition-period compliance, PGT & Associates can assist with transaction-level classification and compliance review.

Disclaimer: This article is for general informational purposes and is not legal or tax advice. Rates, thresholds, rules and forms should be verified against the Income-tax Act, 2025, the applicable Finance Act, Income-tax Rules, 2026 and current official guidance before acting.